Models and Theories Location and Development - EricksonClassroom

Models and Theories
Location and Development
Keller
2009
Location Theories and Industrial Location
•Location Theory
•Any theory used to predict where businesses
will or should be located.
Vocab
•Range – How far will people travel to purchase
good/service
•Threshold – Number of people needed to
support business
All location theories deal with:
•Variable costs – energy supply, transportation expenses and
labor costs.
•Friction Distance:
•Increase in time and cost that usually comes from an
increasing distance from your market.
• ( Distance Decay)
•Factories will be concerned with serving the needs of
nearby markets, rather than those farther away.
Christaller’s Central Place Theory
Definition:
• Market areas (places of buying and selling) are arranged in
a regular pattern (meaning they are predictable).
• The larger the settlement, the farther it is from another
large settlement
• The smaller the settlement, the closer it is to other smaller
settlements AND probably a larger settlement
• Larger settlements are important because they provide
goods and services not available to smaller settlements
• When drawn, it looks like a hexagon
Christaller’s Central Place Theory
Why the Theory?
• The purpose of the theory is to show patterns
in settlements, to help us understand the
relationship and interactions between larger
and smaller settlements
Most importantly: it helps producers find out
where the most profitable location to start or
run a business would be – the bigger the
settlement, the more likely the business will
do better, right?
Central Place Theory
Model
Weber’s Model
•Developed a model for the location of manufacturing plants
•Least Cost Theory
•location of manufacturing plants are located in terms of the
owners desire to minimize three categories of costs:
1. Transportation
2. Labor
3. Agglomeration – large number of
same/interdependent companies in one area
Hotelling’s Model
•Locational interdependence
•Location of an industry can not be understood without
reference to the location of other similar industries
• For Example:
•Why McDonald’s, Burger King, and other Fast food
restaurants are all located close to each other.
Losch’s Model
•Profit maximation is emphasized.
•Is the business in the best location in order to make the most
profit?
•This would be an ongoing model, as other companies develop
or go out of business you would have to adjust.
Development Models and Theories
• These theories deal with why and how
countries have or have not developed
• No theory or model is perfect, but it explains
some parts of the whole
Rostow’s Development Model
• 5 stage mode of development
– Traditional society – not yet started development
• Lots of ag, lots of money allocated to military and religion
– Pre-takeoff - elite group initiates changes
• Begins to invest in infrastructure like water, transportation etc
– The Takeoff – rapid growth into a few activities (textiles or food)
• These develop while rest of country is still traditional
– Maturity – modern tech moves from takeoff industries to others
• Rapid growth and workers become more skilled
– Mass consumption – from heavy industry to consumer goods
• From steel and energy to vehicles and refrigerators
Assumptions Made
• Assumptions
– All countries will have similar developmental
trajectories
– Intrinsic factors such as natural resources and
culture will not affect development
– Countries that undergo development at different
times in history will undergo the same processes
– All countries will have the same access to
development
– The natural goal, path, and purpose of all economies
is to increase productivity and material consumption
Dependency Theory
• This theory basically says that certain regions
and countries control and limit the
development possibilities of poorer countries
• Examples
– Colonialism
– Currency tying (dollar)
• The DT has little hope for development –
some say this is too pessemistic
World-systems Theory
• Immanuel Wallerstein
• Three tiered system: core, periphery, semi-
periphery levels
– Core – dominant in the global economic game
• Activities generate wealth for that country
– Periphery – dependent on core regions and do not
have much control over their own affairs
• Activities generate little wealth for that country
– Semi-periphery – has a little of both. Some control
over own affairs but still heavily influenced by core